Simplicity in TA

[PO]

Quote from dv4632:

Some questions. How do you know that it's the rising wedge that the market is "adhering to" and that a short bias is appropriate? Why not the broken trendline from the 2007 high or the uptrend from the October low and a bullish bias?

Why not look at this pullback as a buying opportunity? Why not say 1320ish is the "buy zone" because of the two possible support lines in that area?

I think this is the reason:

"As I have been telling you recently, there is some unprecedented data coming out in petroleum distillates, and they slap me in the face and tell me we have some very bad economic trends going on, totally out of line with such things as the hopium market - I mean stock market...
"

 

[ammo]

Quote from dv4632:

Some questions. How do you know that it's the rising wedge that the market is "adhering to" and that a short bias is appropriate? Why not the broken trendline from the 2007 high or the uptrend from the October low and a bullish bias?

Why not look at this pullback as a buying opportunity? Why not say 1320ish is the "buy zone" because of the two possible support lines in that area?

he doesnt,you watch and instead of i dont know,you narrow it down to 3 or 4 scenarios,or 12 if you really dont know, but all the time narrowing down the scenario,waiting for a layup,thats when you sit on hands,or two scenarios and when one confirms you trade it with a stop,but you have narrowed it down,some big news with standing, and you put on a trade

 

[dv4632]

Quote from Xspurt:

Technically the Transports can wiggle and cause a pause in the Dow but I'll be looking to take a short signal here and play the bounces again as before.

The risk to the bulls is now high and low for the bears so I am becoming more bearish here and looking for a short signal.

Was this a sell signal on the Dow?

 

[LEAPup]

Quote from dv4632:

Was this a sell signal on the Dow?

Looks like the makings of an inverted cup and handle to me.

 

[Redneck]

Quote from dv4632:

Was this a sell signal on the Dow?

What you have is indecision



Bars 10 thru 4, (before the big down bar), was a sign of weakness – so the big down bar was no surprise

The big down bar reflects everyone is in agreement – sell/ short

However, no follow thru

Buyers stepped back in, sellers and shorts stopped (as reflected by last two up bars)

However = because last two bars are both inside the range of the big down bar – sellers are not being aggressive


At this point both sides are tentative, and waiting/ watching to see who'll flinch first


If/ when price returns to the top of the big down bar – that will be the tell... (of course if it doesn't - then that will be the tell)


Btw there is slight weakness reflected in the last two up bars

what to do

Essentially you should wait for a break out of either side of the range – and if it is to the upside.., you'll be watching till price breaks all the way through the resistance range created by bars 10 through 4 (prior to the big down bar) (a retest and fail is never out of the realm of possibilities)


Plain ole PA

RN

 

[Redneck]

Quote from Redneck:

However = because last two bars are both inside the range of the big down bar – sellers are not being aggressive

RN

screw up alert

I meant to say buyers are not being aggressive


Hard to find good help nowadays

RN

 

[dv4632]

Ok, so if someone is short they would exit the short if price closes above the high of the large red down bar.

From there, it would be long on a breakout above the recent highs or short on a break below the Tuesday low. Is that right?

 

[Redneck]

Quote from dv4632:

Ok, so if someone is short they would exit the short if price closes above the high of the large red down bar.

DV

I’m not into dolling out trading advice –so I’ll pass

I will say; simply waiting for price to close above the high of the larger red candle to exit a short – is a hellofalot of risk….

Quote from dv4632:

From there, it would be long on a breakout above the recent highs or short on a break below the Tuesday low. Is that right?

This is a reasonable plan…., but there are a few other options in the meantime – however they call for adeptness, and smaller TFs


RN

 

[dv4632]

Oh, I'm not trading this move, so wasn't looking for advice per se. Just trying to get a handle on how one would play these longer term moves on a real time basis. My own swing trading isn't all that precise in that I don't pay much attention to individual bars... so just seeing if I could improve things in some way.

 

[Xspurt]

Quote from dv4632:

Some questions. How do you know that it's the rising wedge that the market is "adhering to" and that a short bias is appropriate? Why not the broken trendline from the 2007 high or the uptrend from the October low and a bullish bias?

Why not look at this pullback as a buying opportunity? Why not say 1320ish is the "buy zone" because of the two possible support lines in that area?

Hi dv, sorry I couldn't answer earlier.

Your lines are great and I'd look for reactions on those but the real question is, what is the intent of the market? I believed that the end of last week was the completion of the weekly cycle hence my looking for shorts.

If the weekly cycle kicks in then once the wiggles are sorted out we would see the trend is down. Kicking off the week with 200 points down gives a strong hint that this is underway and we will see how the weekly charts confirm.